1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Grace [21]
3 years ago
10

Knightmare, Inc., will pay a dividend of $6.15, $9.05, and $12.25 per share for each of the next three years, respectively. The

company will then close its doors. Investors require a return of 11.7 percent on the company's stock. What is the current stock price?
Business
2 answers:
iragen [17]3 years ago
8 0

Answer:

Current Price of Stock $21.55

Explanation:

As Knightmare Inc. will pay dividend for 3 years, we can find the price of stock by discounting(using 11.7% required rate of return) the dividends of 3 year period to get the current value of stock.

Value of stock = 6.15/(1.117) + 9.05(1.117)^2+ 12.25/(1.117)^3

Current Price of Stock = $21.55

iVinArrow [24]3 years ago
4 0

Answer:

The current stock price is $21.54

Explanation:

The current price of the share of Knightmare Inc is the present value of all future cash flows receivable from owning stake in the company.

The future cash flows in this sense are the dividends payable by the company in years 1,2 and 3 which are $6.15,$9.05 and $12.25 per share respectively.

The discount factor in this case is given as 1/(1+r)^N where  r is the required rate of return of 11.7% and the relevant year of dividend receipt,hence the share price is computed thus:

Year   cash flow discount factor               PV

1            $6.15      1/(1+11.7%)^1=0.89525   $5.5

2             $9.05  1/(1+11.7%)^2=0.80148      $7,25

3            $12.25  1/(1+11.7%)^3=0.71753        $8.79

Total present value                                      $21.54

You might be interested in
Assume General Electric Company reports the following footnote in its 10-K report. December 31 (In millions) 2016 2015 Raw mater
True [87]

Answer:

$ 244 million

Explanation:

Calculation for how much has GE saved in taxes by choosing LIFO over FIFO method for costing inventory

Tax rate Amount (In millions)

LIFO $ 10,315.00 35% =$ 3,610.25

FIFO $ 11,012.00 35% =$ 3,854.20

Savings in taxes $ (697.00) $ (243.95)

Hence,

Savings in taxes=$ 3,610.25 million-$ 3,854.20 million

Savings in taxes=($243.95 million)

Savings in taxes=($ 244 million) Approximately

Therefore the amount that GE saved in taxes by choosing LIFO over FIFO method for costing inventory will be $ 244 million

6 0
3 years ago
Windsor Company took a physical inventory on December 31 and determined that goods costing $191,500 were on hand. Not included i
WINSTONCH [101]

Answer:

$237,630

Explanation:

Windsor report as its December 31 inventory:

= Inventory in hand as per physical count + Goods purchased from P corporation under FOB shipping basis + Cost of goods sold to A company under FOB destination basis

= $191,500 + $24,510 + $21,620

= $237,630

Therefore, the amount to be reported by Windsor company is $237,630.

7 0
3 years ago
You are aware that your neighbor trades stocks based on confidential information he overhears at his workplace. This information
Margaret [11]

Answer:

Semi-strong Form Efficient.

Explanation:

There are three levels of market efficiency as weak, semi-strong and strong.

In a semi-strong form efficient market, the stock prices change independently of the previous return points and the current information so it is not possible to predict the future stock prices.

The example given in the question, which states that the neighbor has non-public information, can be classified as a semi-strong form efficient market.

I hope this answer helps.

6 0
3 years ago
The County Auditor is the Chief ____ Officer of a county.
Leto [7]

Answer:

The County Auditor is the Chief <u>Fiscal</u> Officer of a county.

Explanation:

The County Auditor is Chief Fiscal Officer of the county. The primary responsibility of the county auditor is to account from the receipts and collection of funds by the county to the disperment of the funds to different county agencies. The county auditor also maintains the records of the movement of the county assets.

3 0
3 years ago
How to be a successful entrepreneur?
pishuonlain [190]

Answer:

Don’t take ‘no’ for an answer

Learn from the best

Stay hungry and ambitious

Never stand still; evolve with the times

Nurture long-term business relationships

Inspire those around you

Trust your gut instinct, not just your spreadsheet

Explanation:

It takes hard work and dedication and they are many free sources that is available today such as videos

7 0
2 years ago
Read 2 more answers
Other questions:
  • You want to show the stock price of a company over the last 6 months. What type of chart would be best for this purpose?
    9·1 answer
  • Alexander has found that both commercial and residential real estate buyers respond positively to his marketing communication me
    5·1 answer
  • In​ long-run equilibrium, all firms in the industry earn zero economic profit. Why is this​ true? All firms in perfectly competi
    11·1 answer
  • The database of Aster Corp. was hacked and confidential data was leaked to its competitors. This resulted in a huge financial lo
    5·1 answer
  • Your client's investment portfolio is 50% growth stocks, 10% foreign stocks, and 40% blue-chip stocks. If the client is interest
    11·1 answer
  • Russell’s is considering purchasing $388,000 of equipment for a four-year project. The equipment falls in the five-year MACRS cl
    9·1 answer
  • General Importers announced today that its next annual dividend will be $2.60 per share. After that dividend is paid, the compan
    11·1 answer
  • Assume the following: The standard labor rate per hour is $17.00. The standard labor-hours allowed per unit of finished goods is
    13·1 answer
  • 67. A provision in a whole life policy that allows a policy owner to terminate the policy in return for a reduced paid-up policy
    7·1 answer
  • According to Michael Kremer, large populations: a. require the capital stock to be spread thinly, thereby reducing living standa
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!